Geopolitical tensions, Fed hawks weigh on sentiment [Video]
|Rising geopolitical tensions between the US versus China and Russia, and the hawkish Federal Reserve (Fed) expectations weighed on market sentiment at the start of the week. The US yields, the US dollar and gold gained, stock indices kicked off the week under selling pressure.
Fed President Jay Powell wills speak following a blowout jobs report, and US President Joe Biden will deliver his State of the Union speech following the Chinese spy balloon incident.
Hence, there is little to cheer.
The US 2-year yield is above the levels it kicked off the year, the US 10-year yield is following suit, and the dollar is sharply bid this week, the dollar index gained nearly 3% in three sessions.
Gold is slightly better bid on the mounting geopolitical tensions, but the rising US dollar and the rising yields will likely cap gains into the $1900 per ounce.
In the currencies markets, the EURUSD tanked to 1.0710 yesterday, the USDJPY jumped to 132, Cable consolidates a touch above the 1.20 mark, while the Aussie-dollar is better bid today as the Reserve Bank of Australia (RBA) hiked the rates by 25bp points as expected, and said that more rate hikes could be down the road, as inflation remains high and sticky.
In indices, the S&P500 retreated by 0.60% yesterday, Nasdaq 100 lost 0.87%.
In technology, Google announced its own conversational AI called Bard AI in response to the Microsoft-supported ChatGPT. Microsoft announced a mystery event where it could talk about ChatGPT, while Baidu announced that it will roll out its own AI in March jumped more than 15% in Hong Kong.
In energy and commodity space, the Indian Tata steel announced an unexpected loss last quarter and the shares slipped more than 4%. BP results were mixed.
Turkish construction stocks rose before the horrified eyes of those who were watching the earthquake news along with the market news, as more than 6000 buildings collapsed, killed thousands.
Crude oil rebounded past the $75pb.
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